Seeking a divorce is a process that many approach with questions and a general lack of understanding. There are many variables that can affect the complexity of the proceedings – one of the variables is the value of the party’s marital estate. Whether you and your spouse have significant financial assets, real estate, business interests, investments or other valuable property, handling a divorce with high-value assets involves careful application of the law under the Texas Family Code.
No divorce is the same as another and each contains varying levels of complexity from legal arguments, concerns for children of the marriage, and the overwhelming emotions from ending a marriage, but there are some specific considerations for high-asset divorces in Texas.
Complex Property Division Laws in Texas
Texas is one of nine community property states. Community property states differentiate between “separate property” and “community property”. Separate property is anything acquired prior to marriage plus gifts or inheritance acquired during the marriage. Community property is any property, other than those defined within separate property, acquired during the marriage. Separate property assets are not subject to division within a divorce, while community property assets must be divided between spouses or awarded to one spouse. While these definitions seem simple, their application is much more complex.
The State of Texas recognizes claims of reimbursement, reconstitution, and awards of a disproportionate share of the estate. These principles, along with separate and community property, are important to determine the true value of the community property estate. Moreover, these principles make a difference in what each party is entitled to and the value that is truly able to be divided. In a high-value estate there will likely be claims to one or more of these principles.
Valuation of High-Value Assets
Many high asset divorce cases involve one or both spouses owning a business, stock portfolios, retirement accounts or real estate. In order to value and divide these assets properly and fairly, you must understand, or work with financial experts who specialize in, finance, business and tax law.
What About Hidden Assets?
In some high net worth divorces, one spouse may attempt to hide assets to avoid an equitable division. For example, they may move money offshore, underreport income or transfer assets to a third party. The legal process provides mechanisms uncover these hidden assets such as, the discovery process, business evaluations, or forensic investigations if needed. High-value divorces require transparency throughout the process to ensure that an equitable division of the entire estate is reached.
Alimony and Spousal Maintenance
High-asset divorces also often feature spousal maintenance (a.k.a. ‘alimony’) as a significant consideration. Texas has specific guidelines for this and high-net-worth individuals may face more complex calculations based on the couple’s lifestyle. For example, earning capacity and the length of the marriage are considered. Your attorney can help navigate this area as well, negotiating fair settlements.
Choosing the Right High-Asset Divorce Attorney
High-asset divorces also can feature spousal maintenance as a significant consideration. Texas has specific guidelines for spousal support and high-net-worth individuals. The Court can consider each party’s earning capacity, the length of marriage, and the asset allocation in the divorce when determining whether to award spousal maintenance and, if it is awarded, the monthly amount.
If you’re navigating a high net worth divorce in Texas, consider partnering with The Law Office of Kaye M. Alderman. Contact us today with any questions you may have about your specific situation. We’re here to help!
